Can Nokia and Microsoft win in the workplace?

March 15, 2011: 5:00 AM ET

The phonemaker and the software giant have struggled in smartphones. But together they just might crack the corporate market.

Nokia's recent decision to outfit its phones with Microsoft's Windows Phone 7 software should be a CIO's dream come true. Corporate tech chiefs love their vendors to compete, and the Nokia/Microsoft hookup would appear to offer companies a viable alternative to RIM, (RIMM) whose BlackBerry system rules with a 33% share of the enterprise smartphone market. Despite recent stumbles, Nokia remains the world's largest mobile-phone maker. And while Microsoft has repeatedly struggled to find its way onto smartphones, its Windows operating system sits on an overwhelming majority of corporate PCs and laptops.

But the alliance is far from an enterprise slam-dunk: Nokia (NOK) has said 2011 and 2012 will be "transition years," which means it could be quite a while before a significant number of Nokia/Microsoft devices even hits the market. And ironically, the current version of Windows Phone 7 isn't geared for business users. Microsoft (MSFT) is only now starting to roll out support for some web-based work applications and a feature that lets people cut and paste text -- table stakes for corporate types.

Indeed, Microsoft intentionally designed its gaming-centric operating system to appeal to everyday smartphone buyers, not IT departments, in the hope that consumers would fall in love with the device and ask their companies to support it. After all, that's how Apple's (AAPL) iPhone and phones powered by Google's (GOOG) Android operating system found their way into enterprises.

But CIOs don't love being bullied into supporting every hot new device that comes along. The proliferation of phone systems adds to their costs, and it makes it hard for them to negotiate deep discounts for buying devices in bulk. More important, devices that aren't designed with corporate clients in mind often lack the security features IT departments demand.

Still, Mark Lowenstein, a wireless industry consultant, thinks the two companies might actually have a chance to shape the corporate computing landscape in the coming years. "The joint assets of NokiaSoft, if channeled in the right direction, could help companies rethink what mobile computing will look like, circa 2013-2015, with smartphones, tablets, and other to-be-defined products," he writes in a recent newsletter.

Put another way, Microsoft understands corporations. Nokia understands wireless. If the two can team up to deliver devices with the right mix of security, management, and productivity features, they could -- together -- end up being a much more formidable force in the workplace than they could ever be alone.

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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